BLOW FOR BRITISH STEEL AS CHINESE-OWNED FIRM REVEALS LOSSES HAVE HIT £400M

Fears over the future of British Steel are mounting after the Chinese-owned company revealed that losses had spiralled to more than £400million.

In just the latest blow to the UK steel industry, the firm said losses rose eightfold in 2022, from £49.5million to £408.4million.

The figures came as the firm, Britain’s second biggest steelmaker, scrambles to secure a taxpayer-funded rescue deal.

Rival Tata Steel last week announced nearly 3,000 job losses, as the sector struggles to move to green steelmaking.

British Steel is seeking state funding to replace its blast furnaces at Scunthorpe with electric arc ones.

A similar deal between Labour and Tata Steel, which owns Britain’s largest steelworks at Port Talbot in South Wales, was signed last week.

The Government has agreed to pay £500million towards the electric arc furnace, with Tata Steel investing an additional £750million, in a push towards net zero carbon emission. 

But the deal, first agreed by the Conservatives, will see at least 2,800 workers lose their jobs.

Talks between Ministers and British Steel, owned by China’s Jingye, are ongoing.

It is feared Jingye will reveal the closure of Scunthorpe’s two blast furnaces this month, though it said yesterday no decision had been made.

Closure would put more than half its 4,500 workers at risk of redundancy and leave the UK unable to make steel from scratch for the first time since the Industrial Revolution.

A British Steel spokesman said: ‘While we’ve invested more than £1billion to maintain our ageing blast furnaces, this is not financially or environmentally sustainable.

We’re in ongoing discussions with the Government to explore potential support for our decarbonisation programme and future operations of our business.’

British Steel is now losing more than £1million a day. Its losses included an impairment charge of £202.9million, which it said reflected a ‘deteriorating outlook for the blast furnace operations’ at Scunthorpe.

The firm said losses continued into 2023 and 2024, and it might require more financial support from Jingye. 

Its parent company handed it £100million in equity in October last year, accounts show. But its commitment to provide further support is not legally binding.

About 33,700 people work in the UK’s steel sector, which makes more than 5m tons of steel a year, but it faces competition from cheap imports, particularly from China.

2024-09-18T21:18:03Z dg43tfdfdgfd